We have a months worth of data to share after the March 19th HARP 2.0 changes were introduced.
♦ It was speculated that the Loan to Value (LTV) would have no cap, the reality is that you can now finance up to 150% of the value of your home. This is an increase from the previous cap of 125%.
- Keep in mind that there are some factors that effect Condominiums and Adjustable Rate Mortgages (ARMs).
♦ If you have a 2nd mortgage, don’t worry! We have lenders that do NOT care about the total overall LTV.
♦ 80% of the applications we have run though the Automated Underwriting process have NOT required an Appraisal.
♦ Investment properties are now eligible for the HARP program.
Like most government initiated programs, there is a difference between the initial concept and the reality. However the positives significantly outweigh the negatives in this program.
We also continue to hear stories of other banks taking months to get loans closed. The refinance process is now taking us about 45 days from start to finish.
Please forward or share this to anyone you know who may benefit from this information, and give us a call so we can walk you through it and answer any questions!
Posts tagged Investment property
HARP 2.0 Improvements!!!!
Investment Property Cash Out Refinance Guidelines
Refinance Guidelines
One of our recent videos focused on Investment Properties in Michigan and the opportunities they present.Fannie Mae just released information about Cash Out Refinances that is even better news for Investors.
Previously, Fannie Mae required 12 months from closing on the investment property until the time to apply for a cash out mortgage. A cash out is NOW allowed immediately if no financing was obtained for the purchase transaction.
Guidelines:
- New loan amount can NOT be for more than the initial investment that was used to purchase the property
- Purchase was Arm’s Length Transaction
- You can provide the settlement statement which shows no financing was needed
- New Title search which shows NO liens on the property
- Source of funds for the purchase must be documented with bank statements, loan documents, etc.
- Any new loans used as source of the down payment must be paid back on the new settlement statement
This is great news which may spur more investors, as many properties may require cash sales which allows them to get access quickly to their money to do it again.
Purchasing an Investment Property
Investment properties (buying a home with the intent to lease to a tenant) are at all time highs, taking up 20% of all purchase transactions in the last 12 months. Big reason for this is that in today’s environment, the home will cash flow immediately.
Most investors are purchasing properties for $100,000 or less and paying cash for these. Here is what you need to know if you are looking to finance an investment property.
- Residential Mortgage Transactions only apply to 1-4 Unit Properties
- Lenders are typically requiring a 25% down payment
- 10% down payment options available on Fannie Mae HopePath Properties
- Non-Homestead property taxes are about 33% higher than that of a primary residence
- Tighter Underwriting requirements – Need more money in the bank after closing
We have a few years experience owning investment properties, and many more years financing these properties in Michigan. Housing affordability is at all time record levels and interest rates are near historic lows, so now is a great time to be an investor. Call us with questions!
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